Could sugar cane save the planet?

Cars that run on sugar cane, fuel made from palm trees - it sounds like an oil-free future that could solve global warming. But, as a major report backs the biofuels revolution, the critics are gathering

For the past few months, motorists in Somerset have been taking part in an unusual experiment: filling their cars with fuel made of fermented Brazilian sugar cane. Only a handful of cars, including 10 police vehicles, can use the resultant ethanol and only five pumps - on Morrison's forecourts - can supply it. Nevertheless, the council has high hopes. In three years it aims to have 300 cars running on bioethanol. By then, it will be made at a special plant for turning the county's wheat surplus into biofuel.

It sounds like a dream of the future. Forget about digging up more and more oil to run the ever increasing number of cars. Just grow the fuel and relax as the problem of CO2 emissions is finally solved. If only it were so simple.

First, the good news - the stuff that is being grown works. 'The cars - all Ford Focus flexi-fuel vehicles - cost no more than standard cars and the bioethanol fuel, called E85, is slightly cheaper than regular petrol,' said Somerset's renewable energy officer, Ian Bright.

It is far-sighted project that aims to help reduce Britain's carbon emissions. And, according to the House of Commons Environment, Food and Rural Affairs select committee, it needs to be followed by many more councils, government departments and businesses. In a special report to be published tomorrow, the committee will warn that a major change in the government's approach to energy derived from crops and plants is urgently needed. Ministers have been far too timid, incoherent and disorganised in promoting bio-energy, it will state.

The committee says five different government departments are taking the lead on various aspects of bio-energy. The MPs fear that no one is in proper control. Bio-fuel policies announced by ministers have also been far too vague and short-term to give private investors and planners the confidence to sink serious money into projects.

In addition, the political impetus created by the green agenda at last year's G8 summit in Gleneagles, where all the VIPs' cars were flexi-fuelled, has been lost. Why, the MPs pointedly asked, was the British government fleet not following suit? In Sweden, by far the Euro-leader on biofuels, drivers of E85 cars are not only exempt from congestion charges, they can park for free.

The critical nature of the situation was underlined last week with the publication of reports by the Tyndall Centre in Britain, and by Nasa, which indicated that the impact of global warming is being felt far more quickly than even the most pessimistic researcher expected a decade ago. The world is melting - rapidly. A major commitment to renewable energy, and to biofuels in particular, would therefore be widely welcomed by climate campaigners. However, it also risks a backlash from some scientists and conservationists. Yes, the use of plant material as a substitute for fossil fuels could help the environment and halt global warming, but it also has the potential to cause serious ecological damage.

This point was stressed last week by the director of Kew Gardens, Sir Peter Crane. 'Biofuels certainly have great potential, but they also carry great risks. They are not a panacea.' For example, growing plants for fermentation using nitrogen fertilisers does not necessarily cut down on carbon emissions. 'Those fertilisers may well have been made in factories that burn fossil fuels, either oil or coal, so you would still be pumping carbon dioxide into the atmosphere,' Crane said.

In addition, planting crops - such as sugar cane or sugar beet - for use as sources of biofuels either means that fields are no longer used for food production or that wild habitats have to be cultivated over. 'This is certainly not a straightforward issue,' Crane said.

The point is backed by the Royal Society for the Protection of Birds. It points out that lapwings, skylarks and bunting are suffering major declines in numbers. Set-aside fields - land that has been taken out of agriculture and allowed to go wild - offer precious havens. If farmers are soon to be offered high prices for growing 'energy crops' on this land, they may well be tempted to set-aside for bio-energy crops - with serious consequences for many bird species.

Then there is the international dimension. Some biofuels use oil from palm trees whose growth often involves chopping down rainforests. Making sugar-cane bioethanol can produce silage that pollutes local rivers. Other bio-crops rely on environmentally harmful fertilisers. And where Britain is concerned, the likely need to import at least some bio-fuel from as far away as South America means the environmental balance sheet must include transport, potentially reducing the carbon-emissions gains.

Nevertheless, biofuel's capacity to help Britain meet its climate change obligations is considerable. One study suggests that Europe has the potential to provide 40 per cent of the fuel it needs for transport from crop fermentation.This would help to make dramatic cuts in carbon dioxide emissions.

Plants breathe in carbon dioxide. Then they are fermented to make ethanol. In turn, this alcohol is burned in a car engine and the carbon dioxide is returned to the atmosphere. There is no overall addition to atmospheric levels of the gas, however: it is merely recycled. By contrast, petrol and diesel are pumped from reservoirs laid down millions of years ago. Burning them adds to atmospheric carbon dioxide levels.

Passenger cars alone accounted for 13 per cent of all carbon emissions in 2003 (residential emissions accounted for 15 per cent, manufacturing for 15.7 per cent and the energy industries 38.1 per cent.) So a move to bio-ethanol fuels and other forms of bio-energy has great potential to help fight global warming. Hence the committee's enthusiasm. The trouble, the committee says, is that the government has decided on a carrot-and-stick strategy, with duty being lowered on biofuel and a penalty being imposed on oil companies that continue to market only standard petrol and diesel. But this combination is not sufficient to bring about a major change in energy strategy in this country. Worse still, says the report, is the lack of a bio-energy strategy.

This point is backed by bio-energy expert Jeremy Woods of Imperial College, London. 'For a start, the government still has not got its fuel pricing right. E85 is roughly the same price as regular petrol, but a litre will only take a car two-thirds the distance that regular unleaded will carry it. So drivers are still losing out. Prices should be adjusted to compensate for that.

'The government has to send out signals that will encourage investors to commit their money to manufacturing plants and making cars that run on bioethanol. Their rhetoric on climate change just does not match their actions.'

And this is a crucial issue. A move to a private transport system that is based on biofuels will take years, if not decades, to implement. At present, only two cars - the Saab 9-5 BioPower and the Ford Focus FFV - can run on bioethanol. Many more models will be needed.

Certainly, initiatives are worryingly rare and piecemeal - particularly as Britain is now committed to ensuring bioethanol forms 5 per cent of all its total fuel sales for private cars in Britain by 2010, and 10 per cent by 2015.

Fortunately, there are ways around most of these challenges. The MPs will urge the government to introduce a 'carbon-assurance' scheme to establish the real environmental costs and benefits of each bio-source, and tailor the use of their carrots and sticks accordingly. They are also expected to recommend a 'bio-map' of Britain with the aim of matching local fuel and energy sources to needs and demands, meaning in theory that agricultural land-use and transport effects can be taken into account.

A 'second-generation' of biofuels, being developed in Germany and elsewhere, could also deliver dramatically higher gains with fewer environmental side-effects, the committee adds. And at least one existing technology, developed in South Africa's apartheid-era Sasol plant synthetically to turn coal into oil, could be used with a more environmentally friendly substance such as wheat. Further down the road - much further, the MPs will suggest, despite the occasional tabloid headline - is the prospect of hydrogen-powered cars and trucks.

'The technology is developing,' added Woods. 'We may not be there, but the signs are hopeful.'

Around the world

· Brazil's biofuel programme generates 1,350 megawatts of electricity each year and reduces - by 10 million - the number of cars running on petrol.

· Sweden uses wood from its forests to generate 16 per cent of its energy needs.

· The US is the world's largest producer of ethanol at 16 billion litres a year. Five million vehicles run on E85 - a fuel mixture of 85 per cent ethanol from grain and 15 per cent petrol.